Midas Magic seeks its investment objective of capital appreciation by focusing primarily on large companies, with a broad orientation towards conservatively priced value stocks and aggressively priced growth issues. The Fund seeks portfolio companies with global operations and superior returns on equity and assets. Top performing holdings in the Fund’s portfolio in the three months ending May 31 are Juniper Networks Inc. (designs and sells network infrastructure) and the “Kimball companies” – Kimball Electronics Inc. and Kimball International Inc. – which were created after a special situation split up of a family run predecessor. The Fund’s holding of Coach Inc. (global luxury retailer) hampered returns as its shares sagged on declining North American sales. The Fund’s overall portfolio, as compared with the S&P 500, has a heavy weighting towards financial services, and less to economically sensitive industries such as energy and defensive consumer products companies, in anticipation of gradually improving economic prospects. The Fund currently anticipates reducing some holdings to adopt a more defensive investment posture in the upcoming months.
Midas Fund's strategy is to seek investments in higher quality senior and intermediate producers of precious metals and other natural resources with a growth component. As the gold price has fluctuated between $1,150 and $1,300 per ounce during the year to date, the Fund’s portfolio has shown volatility, in good part from its holding of shares of the major gold producer AngloGold Ashanti Ltd over market speculation about its efforts to de-lever its balance sheet. Midas Fund has benefited by the recent strong performance of its holdings of shares of major gold producer Newmont Mining Corp., which made an opportunistic purchase of a U.S. gold mine from AngloGold. Intermediate gold producer B2Gold Corp. also created positive returns for the Fund as it reported record quarterly gold production. With a negative impact on the Fund’s portfolio, prices for the shares of developing platinum miner Platinum Group Metals Ltd. have fallen after the company reported project cost increases and delays to its mining plans. Using the Fund’s cash reserves, a recent addition to the portfolio are shares of a long standing company in the minerals sector, with a value-add technology and recent acquisition to provide potentially increasing revenue and cash flow.
uses a core “asset allocation” strategy to seek its investment objective to preserve and increase the purchasing power value of its shares over the long term. The Fund’s asset allocations and target percentage ranges are gold (10-30%); silver (0-20%); Swiss franc assets (10-30%); hard asset securities (15-35%); and large capitalization growth stocks (15-35%). In the recent period, the Fund has benefited moderately from its target allocations to gold and silver, and from its use of leverage. In May, the Fund’s returns were benefited when its hard asset securities investment in Syngenta AG (a global leader in crop-protection products) rose following a takeover bid, but were hampered by a decline in the shares of Sociedad Química y Minera de Chile S.A., in the wake of a widening corruption scandal. To the extent consistent with tax planning and lower levels of portfolio turnover, Midas Perpetual Portfolio may reduce some holdings over the months ahead to reduce or eliminate leverage.